BT has begun diverting the first customer calls onto its Internet Protocol-based, next-generation network, five months after the 21st Century Network (21CN) project was announced. Under 21CN, BT plans to convert its entire network to IP, a move which it says could mean cost savings of £1bn a year by 2009.

The telco began diverting voice traffic between the 21CN network nodes in London's Woolwich and Cambridge at the end of October, and is to begin commissioning a third next-generation node, at its Faraday exchange in London, on Thursday. The trial is the first milestone in what BT calls the most ambitious network transformation project in the world.

"This is an historic occasion," said BT Wholesale chief executive Paul Reynolds. "The PSTN (public switched telephone network) has served us well for over a hundred years. Now, for the first time, we have public voice on a single IP network where voice calls are transmitted in data packets."

Over the next few weeks BT plans to add call traffic from 38 digital local exchange units in Cambridgeshire, Essex, Lincolnshire, Suffolk and Hertfordshire onto the Cambridge-Woolwich link. When all the exchanges are switched over, the IP link will handle 1.5 million lines, at peak times handling about 10,000 simultaneous calls or 1 percent of the trunk traffic on BT's PSTN, BT said. Large-scale migration of PSTN services is to begin in 2006.

The company said it has also made progress with its "deep fibre" experiment of linking homes direct with fibre-optic cable, with the first customer connections going live at the end of October. About 100 BT employees will get telephone and broadband over fibre in the next two months, and by March another 1,500 customers in Martlesham Heath in Suffolk, Milton Keynes and London’s Docklands will be linked up. BT isn't proposing a commercial service at the moment, merely seeing the trial as an information-gathering exercise.

The 21CN rollout is expected to be completed by 2009, when 99.6 percent of BT’s customers would have access to the new infrastructure. The company has said that £1bn cost savings are to be passed on to customers, though the company has declined to indicate any specifics. The IP infrastructure is designed to simplify BT services and eliminate multiple billing, where voice and various data services are billed separately.

Despite running fibre to customers' residences, BT said it is neither considering competing with the cable companies with video on demand, nor promising unlimited bandwidth. "We’re not about chucking speed for the sake of it," Reynolds told Techworld at the 21CN launch last summer.

The pilot has been supported by Marconi with core network softswitches and multi-service access nodes, Alcatel with IP ethernet switching equipment and Siemens with metro media gateways and routing platforms. ECI has supplied optical network units for customer premises in the fibre-to-premises trial.